Help to Buy: Equity Loan

What is Help to Buy: Equity Loan?

Help to Buy is a government scheme to assist first-time buyers get a property. There are several different schemes with the Help to Buy: Equity Loan scheme being a form of affordable home ownership.

The Help to Buy: Equity Loan scheme provides eligible purchasers with an Equity loan to assist with the purchase of a new build home. The buyer will need a deposit of 5% and the government assists with a 20% equity loan (also known as shared equity) which is interest free for five years. The remaining 75% would typically be made up of a mortgage.

The Help to Buy Equity Loan scheme will be closed to all new applications on 31^st October 2022 with the home purchases needing completion by 31^st March 2023.

 

When is a valuation needed?

If you have purchased a property with the assistance of an Equity loan scheme and you are selling your home or looking to repay some or all of the equity loan then a valuation report is needed.

The Homes and Communities Agency (HCA), now replaced and trading as Homes England, will appoint a Target HCA (Target Servicing Limited) to be the equity loan administrator. The administrator will work out the total amount of equity loan that needs to be repaid based on the market value of the property as well as the equity loan percentage.

The market value will be determined by a Royal Institution of Chartered Surveyors (RICS) valuation, or the sales price. An independent valuation report from an RICS chartered surveyor will need to be produced in accordance with the Target HCA requirements.

 

How Blackacre can assist

We can provide an independent valuation report compliant with the target HCA who administered the Help to Buy Equity Loan scheme on your property.